Hank the Third

[Bob Rosadini]

From Bloomberg News

 

Henry Ford III is rising to the top of a dynasty facing crisis

 

Keith Naughton, Bloomberg  /  May 14, 2020

When Wall Street analysts call Ford’s investor relations department these days, they’re likely to be greeted by Henry Ford himself.

 

It’s not the founder, of course, and it’s not a recording of him either. It’s Henry Ford III, the patriarch’s great-great grandson, who at age 39 has been thrust into the crucial role of liaison between the struggling automaker and its investors.

 

The III’s ascent -- along with that of his cousin, the 32-year-old Alexandra Ford English, just named to the board of electric-truck maker Rivian Automotive Inc. -- marks a coming of age for the fifth generation of the Ford dynasty. For all but 20 of its almost 117 years of existence, Ford has been led by a family member. And while critics lay much of the blame for the company’s current struggles on the Fords, the family sees Henry and Alexandra as their best hope of maintaining control for years to come.

 

“They’ve moving above the radar line now,” Jeffrey Sonnenfeld, associate dean at the Yale School of Management, said of the automotive heirs. “This is what they were destined for when they entered the company. When we look at their dads, they’re on the same trajectory, with at least one, if not both, ending up on the board.”

 

The changes come as the company endures another crisis, with losses mounting and North American factories idled in the face of coronavirus shutdowns. But as Ford shareholders gather for a virtual annual meeting Thursday, the founding family remains firmly in control, aided by a special class of stock that gives them 40 percent voting power.

 

That arrangement will once again come under scrutiny at the annual meeting. A shareholder proposal would strip the family of its special class of stock and go to a one-share, one-vote arrangement. A similar motion garnered 34 percent support of Ford shareholders last year. Some investors have long complained that super-power voting weighs down the value of publicly traded companies, while giving founding families sometimes unwarranted control.

 

Since Bill Ford became chairman in 1999, the automaker’s shares are down 91 percent, while the S&P 500 index is up 129 percent.

Unlike General Motors and Chrysler, however, Ford avoided bankruptcy in 2009.

 

And for all their problems, the Fords have earned a reputation for not meddling in the corporate decision-making process. “The Fords, in general, have a pretty good history of letting the executives run the company,” said Rob Du Boff, corporate governance analyst for Bloomberg Intelligence.

 

Henry Ford III and Ford English are likely years away, if ever, from assuming the uppermost leadership roles. Jim Farley, promoted March 1 to chief operating officer, is the clear heir apparent to current CEO Jim Hackett. But each is now moving through a variety of jobs at the company. Henry, known as “Sonny” among friends and family, was director of corporate strategy before taking the investor relations job. He is the son of Edsel Ford II, a board member and now a company consultant.

 

Ford English, the daughter of Bill Ford, assumed a corporate strategy position similar to the one previously held by her cousin, while also being named to the board of Rivian Automotive, the electric-truck maker in which Ford has taken a significant ownership stake.

 

Their seasoning is similar to what their fathers received while rising in the ranks in the 1980s and ’90s. Bill and Edsel Ford landed on the company’s board of directors in 1988 while still in their 30s and agitated successfully for more prominent roles as directors. Edsel eventually rose to president of Ford’s highly profitable credit unit before retiring in 1998, and Bill became company chairman in January 1999 and served as CEO from 2001 to 2006.

 

For Henry and Ford English, working in the family business may not have been preordained, but close to it. After graduating from Dartmouth in 2002 with a degree in history, Ford III taught middle and high school math and history.

 

Then in 2006, at the age of 25, he joined Ford in labor relations. He helped to negotiate a contract with the UAW, similar to Bill Ford’s first job at the company in 1979. Henry III went on to work in purchasing, dealer relations, as a vehicle program analyst and as global marketing manager for Ford’s high-performance sports cars, drawing on the company’s racing heritage highlighted in last year’s Academy Award-winning “Ford v Ferrari.”

 

“In the back of my mind, I knew I always wanted to work for Ford,” Henry Ford III told Automotive News in 2014. “Our family’s legacy and heritage are very important to me and I knew it was something I wanted to carry on.”

 

In investor relations, the young scion will face tough questions about Ford’s falling stock and growing losses.

 

“Investor relations is the best place that you can put somebody that you’re trying to groom for leadership because they are going to be dealing with complaints all the time,” Minow said. “It will give him a real reality check.”

 

Unlike some children of famous people, he has no qualms about using his name in business, recalled Los Angeles Ford dealer Beau Boeckmann. Ford III worked at his store selling cars during the summer of 2009 while getting an MBA from the Massachusetts Institute of Technology.

 

“When he walked through the door, he said I want to be called Henry Ford and have it on my nametag,” Boeckmann said. “Customers would say, ‘Wait a minute, your name’s Henry Ford, are you any relation?’ And he’d laugh and say, ‘Yeah, I’m Henry Ford III.’”

 

Ford English also tried out another industry after she earned a bachelor’s in human biology, physiology and neuroscience at Stanford and an MBA at Harvard. She worked in retailing in the merchandising divisions of Tory Burch in New York and Gap Inc. in San Francisco.

 

Her first job at Ford, in 2017 at the age of 29, was in a department helping to find new mobility solutions for crowded cities, and then she moved on to Ford’s self-driving vehicle unit.

 

“I was originally hesitant to join Ford because I don’t have a technical background and it’s a company built upon engineering,” Ford English said in a 2018 company-sponsored video. “But I knew what I could bring to the company and I was very aware of those skills.”

 

Joining the company and rising to the top are two different things, of course. Henry Ford II, the outsized and colorful leader of the company for 35 years until his 1981 retirement, once famously declared “there are no crown princes at Ford.”

 

The latest Henry has said he works hard not to appear “to have any sense of entitlement.” That may be what drove him to turn down an invitation to a Fourth of July party from dealer Boeckmann back in the summer of 2009. Instead, Henry III remained in the showroom all day, selling cars in the California heat.

 

“I said, ‘Hey Henry, why don’t you come join us for the family picnic?’ But he said, ‘Thank you, but I’m here selling cars,’” Boeckmann said. “He’s extremely humble and he is aware that he needs to work harder because of his name.”

 

 

[twintornados]

It is that very "family intangible" that draws me to the company as an enthusiast, admirer, and share holder. Sure, I could "enhance my portfolio" by getting a better performing stock, I could be enjoying a Camaro, a Cadillac and a Chevy 1500 as my current vehicles, but their is no admiration to be had at GM, FCA et al.... I'll stick with Ford. Great story!

[fabfordeb]

Hank III attended our annual Fabulous Fords Forever car show every year when he was working in California.  Very cordial and approachable.  I asked him about the Early Bronco that one of our Early Bronco Limited club members restored for his father.  He said they still have it and love it, drive it often.

 

Edited May 15, 2020 by fabfordeb

[Bob Rosadini]

3 hours ago, twintornados said:

It is that very "family intangible" that draws me to the company as an enthusiast, admirer, and share holder. Sure, I could "enhance my portfolio" by getting a better performing stock, I could be enjoying a Camaro, a Cadillac and a Chevy 1500 as my current vehicles, but their is no admiration to be had at GM, FCA et al.... I'll stick with Ford. Great story!

Ditto! well said.  

[FordBuyer]

Well, they sure gave him a super tough assignment as head of investor relations. That sure will be a test as most investors aren't happy campers. I wish him luck.

[Deanh]

he was our regional rep for a while....we have never had one anywhere near as good as he was....ALWAYS got back to you in an expedient manner with a definitive answer...our reps since have SUCKED

[mackinaw]

35 minutes ago, FordBuyer said:

Well, they sure gave him a super tough assignment as head of investor relations. That sure will be a test as most investors aren't happy campers. I wish him luck.

 

I think investors are understanding of the current situation.  I know I am.  I just listened to yesterday's annual meeting and noticed the yearly proposal to do away with Class B shares (which favors the Ford family) was defeated 65% vs. 35%.  

[Bob Rosadini]

1 hour ago, Deanh said:

he was our regional rep for a while....we have never had one anywhere near as good as he was....ALWAYS got back to you in an expedient manner with a definitive answer...our reps since have SUCKED

Your comment speaks volumes about the guy.  Hopefully he learned a lot at the dinner table from Edsel as well.  Any of you have any idea what jobs Edsel had in the company before he retired?

[FordBuyer]

2 hours ago, Bob Rosadini said:

Your comment speaks volumes about the guy.  Hopefully he learned a lot at the dinner table from Edsel as well.  Any of you have any idea what jobs Edsel had in the company before he retired?

 

I believe he headed Ford Motor Credit for awhile. Recently, he spearheaded the Campus Martius project in downtown Detroit, and is or was invested in Oakland Pontiac airport. Also connected with Edsel and Henry Ford Mansion projects. 

 

I will say this about the Ford family......they are very down to earth and affable. Back in the early 80's, I played doubles tennis with Clay Ford Sr. and he was just one the guys in spite of body guards not very far away. Btw, he was a good tennis player.

 

 

 

[mackinaw]

9 minutes ago, FordBuyer said:

I will say this about the Ford family......they are very down to earth and affable. Back in the early 80's, I played doubles tennis with Clay Ford Sr. and he was just one the guys in spite of body guards not very far away. Btw, he was a good tennis player.

 

I know that Bill Ford was playing "pond hockey" regularly with a bunch of guys in the Ann Arbor area.  Don't know if he still does.

[bzcat]

Family ownership keeps Ford an American company for better or worse. If Ford was investor owned like Chrysler, it would have been sold or merged with someone long ago.

 

As for share price and criticism that company lacks real long term strategy, I think the facts speak for themselves. Ford was the number two car company in the world when Bill became President in 1999. It is now number five just barely beating Honda last year having been passed by Toyota, VW, and Hyundai in the last 20 years. And if you consider Renault-Nissan-Mitsubishi a single company as some industry analyst do, the pending FCA-PSA merger, and the fact that Ford will fall behind Honda this year, you are looking at Ford being in 8th place - basically the smallest of the full line mass market car company in the world. So in a industry where scale and size means a lot to profit margin, Ford is kind of going the wrong way. How long can Ford stay independent? I don't know but a lot of the challenges Ford is facing now has to do with scale and it would help to be bigger with more cash flow. 

 

Before someone makes the inevitable comment about size doesn't equal profit, Ford is shrinking but also not making profit. In fact, you can almost trace Ford's declining profit by declining revenue... Ford has high fixed costs so shrinking doesn't get you prosperity... it begets more poverty. 

 

What's most amazing about this industry in the last 20 years is the rise of Hyundai... they went from nobody to the same size as GM (and will probably pass GM in 2020).

 

2019 Worldwide Sales Volume (millions of units)

1. VW 10.97m

2. Toyota 10.74m

3. Renault Nissan 10.06m

4. FCA-PSA merger pending 7.91m

5. GM 7.72m

6. Hyundai-Kia 7.20m

7. Ford 5.39m

8. Honda 5.17m (Honda is on pace to pass Ford in 2020)

9. Daimler 3.34m

10. Suzuki 3.01m

 

1999 Worldwide Sales Volume

1. GM 8.41m

2. Ford 6.64m (+ 0.97m for Mazda which Ford controlled + Volvo 0.5m which Ford purchased in 1999 = total 8.11m)

3. Toyota 5.46m

4. Daimler  4.82m (DaimlerChysler days)

5. VW 4.78m

6. Fiat 2.63m

7. PSA 2.52m

8. Nissan 2.46m

9. Honda 2.43m

10. Renault 2.35m

~~~

13. Hyundai-Kia 1.33m 

Edited May 15, 2020 by bzcat

[jpd80]

The most compelling and worrying thing about Ford is that it refuses to grow its business, everything in the past decade has been about making a andselling less but charging more.This selfish, inwards looking attitude has a price, Ford will wake up and realise

that it's still just  a  frog in a pot and unable to make money on anything but larger trucks, utes and commercial. 

Edited May 15, 2020 by jpd80
Blasted autotext errors

[CKNSLS]

The above two posts are actually factual.

 

There are even Ford enthusiasts on this site posting that there is a storm brewing.......

 

 

[Bob Rosadini]

Wait guys- I'm confused.  Don't you realize that the Koreans and the Japanese are losing their asses on all the cars they are building.  A fact- I've been corrected many times when I've pissed and moaned about building great cars and then ignoring them.  But just read today, last Fusion goes down the line in July.  I've posted before-last new car I bought was a Taurus SHO.  Started looking for a CPO SHO in Feb.  None in New England then thanks to some BON posters started looking for Fusion Sport and then MKZ 3.0T.  Finally found an MKZ.  Great car- but never knew this 400HP car even existed.  Both gone.   Classic Ford- build a good product then let it wither on the vine.

 

 

[2016RS]

Stock price will dictate.......

 

 

 

 

 

 

 

 

 

 

 

 

[bzcat]

1 hour ago, Bob Rosadini said:

Wait guys- I'm confused.  Don't you realize that the Koreans and the Japanese are losing their asses on all the cars they are building.  A fact- I've been corrected many times when I've pissed and moaned about building great cars and then ignoring them.  But just read today, last Fusion goes down the line in July.  I've posted before-last new car I bought was a Taurus SHO.  Started looking for a CPO SHO in Feb.  None in New England then thanks to some BON posters started looking for Fusion Sport and then MKZ 3.0T.  Finally found an MKZ.  Great car- but never knew this 400HP car even existed.  Both gone.   Classic Ford- build a good product then let it wither on the vine.

 

 

 

They are not necessarily making that much on cars either but they are growing their SUV business and emerging market a lot faster than Ford... which has been looking down at its shoes mumbling to itself since Mulally left.

 

Ford has basically turned in a big goose egg on growing the business since Mulally left in 2013. The China business went to sh!t. Hyundai ate its lunch in India. Toyota and Honda have overtaken Ford in South America. Southeast Asia and Australia has been a mess after the divorce with Mazda with no vision or leadership.

 

For a family controlled business, the obsession with stock price seems really strange... The advantage of family control is so you can invest and grow the business without pressure from Wall Street gadflies. I'm really not sure why they care so much about stock price in the short term. To me, it is much more important to figure out how to sell more SUV, vans, and pickup truck outside the US. Giving up on cars is not necessarily the wrong move... they do have lower returns. But giving up on a market when Ford didn't try to sell the right product is a real sin. There are markets where Ford compete now where it doesn't even sell a van... which is really f'ed up because vans are historically probably Ford's most profitable vehicle. Where ever Toyota is selling Hiace, Hilux and Prado, Ford should be there selling Transit, Ranger, and Everest. There is only about a dozen car companies left outside China and soon some of the Chinese companies will be bigger than Ford. To choose not to compete is really not an option for Ford. 

Edited May 16, 2020 by bzcat

[silvrsvt]

10 hours ago, bzcat said:

For a family controlled business, the obsession with stock price seems really strange... The advantage of family control is so you can invest and grow the business without pressure from Wall Street gadflies. I'm really not sure why they care so much about stock price in the short term. To me, it is much more important to figure out how to sell more SUV, vans, and pickup truck outside the US. 

 

"Coming out of COVID, it really is all about performance," he said. " Look, you know, management's compensation is heavily tied to our stock, so it's in everyone's interest to get our stock price back up."

 

https://www.freep.com/story/money/cars/ford/2020/05/14/ford-f-150-launch-2020-coronavirus/5189929002/?utm_campaign=snd-autopilot

 

What it boils down to is the stock is really way too depressed at its current numbers vs what it actually should be. 

[akirby]

I think Ford’s problem the last 20 years is they keep changing course too much.

 

They probably should have just kept CD3 for Fusion and Edge.  CD4 barely lasted 7 years.  Edge will have 3 platforms within 8 years.

 

Maybe they should have kept the 2.5L NA instead of all those 1.x Ecoboost engines.
 

F150 gets a lot of updates but the basic platform hasn’t changed drastically outside the aluminum body.  Just tweaked a little.  
 

China was a bust although everybody was wrong about that not just Ford.   Maybe instead of trying to fix Europe and South America it’s time to cut bait or start over.

[CKNSLS]

4 hours ago, akirby said:

I think Ford’s problem the last 20 years is they keep changing course too much.

 

They probably should have just kept CD3 for Fusion and Edge.  CD4 barely lasted 7 years.  Edge will have 3 platforms within 8 years.

 

Maybe they should have kept the 2.5L NA instead of all those 1.x Ecoboost engines.
 

F150 gets a lot of updates but the basic platform hasn’t changed drastically outside the aluminum body.  Just tweaked a little.  
 

China was a bust although everybody was wrong about that not just Ford.   Maybe instead of trying to fix Europe and South America it’s time to cut bait or start over.

 

 

I had two Contours with the 2.5 Duratec V6. What a GREAT MOTOR.  I thought those were great cars. I guess I was among the few however.

Edited May 16, 2020 by CKNSLS

[rmc523]

6 hours ago, akirby said:

I think Ford’s problem the last 20 years is they keep changing course too much.

 

They probably should have just kept CD3 for Fusion and Edge.  CD4 barely lasted 7 years.  Edge will have 3 platforms within 8 years.

 

Maybe they should have kept the 2.5L NA instead of all those 1.x Ecoboost engines.
 

F150 gets a lot of updates but the basic platform hasn’t changed drastically outside the aluminum body.  Just tweaked a little.  
 

China was a bust although everybody was wrong about that not just Ford.   Maybe instead of trying to fix Europe and South America it’s time to cut bait or start over.

 

I'll never understand how they can take one approach with the F-series trucks, and then a complete opposite with the rest of your lineup.

 

To your point, F-150 is consistently updated on a 3-6 year MCE/New cycle, but the bones underneath often last two generations (there are some changes but not all new even with an "all new" model).

 

Then look at the rest of the lineup, and they do the opposite - don't refresh products consistently and keep swapping platforms every few years.  Compare that to someone like Toyota which keeps the same platform for decades and consistently updates the body.

 

Maybe - hopefully - they'll finally do this with C2.

[snooter]

7 hours ago, silvrsvt said:

 

 

 

 

https://www.freep.com/story/money/cars/ford/2020/05/14/ford-f-150-launch-2020-coronavirus/5189929002/?utm_campaign=snd-autopilot

 

What it boils down to is the stock is really way too depressed at its current numbers vs what it actually should be. 

Thats the spirit....keep preaching and fords warren jeffs type followers will continue to believe in the fairy dust

[jpd80]

It's hilarious when articles refers to the F150 being the oldest truck of the three (GM & RAM)

and needs a four week break to change over the plants, it's not that kind of generational change.

[silvrsvt]

7 hours ago, akirby said:

They probably should have just kept CD3 for Fusion and Edge.  CD4 barely lasted 7 years.  Edge will have 3 platforms within 8 years.

 

The reason that happened was because Ford already had two CD class platforms.

 

The CD3 was Mazda based and the CD4 was the Mondeo, which in turn was based on the C platform of the Focus.

[akirby]

1 hour ago, rmc523 said:

 

Maybe - hopefully - they'll finally do this with C2.

I said the same thing about CD4.  

[Moosetang]

11 hours ago, silvrsvt said:

 

 

 

 

https://www.freep.com/story/money/cars/ford/2020/05/14/ford-f-150-launch-2020-coronavirus/5189929002/?utm_campaign=snd-autopilot

 

What it boils down to is the stock is really way too depressed at its current numbers vs what it actually should be. 

Wall Street doesn't like the family control, the lack of aggressive union-bashing, and what they see as too much focus on the cars vs the profits. That likely never changes while Ford stays Ford (and modern Wall Street stays itself). So maybe it is time to do what once seemed like an oddball, fringe notion: have the family take the company private for a bit while it weathers this crisis and gets itself sorted so it can do so without needing to focus on dividends and beating quarterly profit forecasts. 

Edited May 17, 2020 by Moosetang